An alliance would mean internet users would be able to search for and see the location of 200,000 businesses listed in Yellow Pages by logging on to Google Maps.
Yellow would use Google to provide maps for its yellow.co.nz website, spelling an end to head-on competition between the old and new powerhouses in the business directories market.
Yellow digital media director Blair Glubb says no deal has been signed, but he expects Yellow and Google to have a closer relationship over the next 12 to 18 months.
"There is an opportunity for a broader strategic relationship and the model for that would be that Sensis and Google have signed an agreement in the Australian market covering maps and search."
Sensis is a subsidiary of Telstra that publishes the Australian equivalent of the Yellow Pages. It agreed in November to hand its listings to Google and to use Google's search and map technology to power its own site, effectively becoming a sales agent for Google in a deal that was portrayed by the Australian media as a capitulation by Sensis.
Yellow and Google make money from online advertising by persuading businesses to pay them to have their listings returned first and with more information, when consumers search for services on their websites.
Google wants rich business content and Yellow is the best provider of that, Mr Glubb says. "They also want sales force reach, that is particularly important for them, and Google has not been immune to global cutbacks. Mapping isn't a core capability of Yellow."
Google declined to comment.
Yellow Pages turned down an approach from Google in 2006, when it first requested access to Yellow Pages' listings.
Mr Glubb said a year ago that Yellow Pages thought then "that strategy was not a good thing for us" and it intended to compete with its own map-based search service.
Google has since beefed up Google Maps with the launch of Street View, an application that lets internet users take a virtual "walk" down city streets and view photos of the scene.
Revenues from yellow.co.nz are up 50 per cent on the last financial year and will contribute more than $20 million - or 7 per cent of Yellow's total directory advertising income - in the June year, Mr Glubb says.
"There is little doubt digital, in some aspects, is going to be impacted by the economy - it can't not be. But I am quite bullish about the year we are going to have. We are probably outstripping market growth by a third."
Yellow has boosted its digital division with the acquisition of online classified advertising site finda.co.nz for an undisclosed sum, he says. Finda, which was half- owned by New Zealand Herald publisher APN, lost $2.3 million on revenues of $3.9 million in 2007.
- The Dominion Post